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March 21, 2024–The State of California is seeking help from the federal government to speed up work on a key land crossing on the border with Mexico aimed at improving the flow of trucks to and from the Golden State.

“As the representative for international affairs and trade, building the Otay Mesa East border crossing is a top priority for me and my work,” said Eleni Kounalakis, Lt. Governor of California.

“I have been really very active in trying to elevate this as something that our federal government should be focused on,” she said, noting that construction on the Mexican side is complete and waiting for the U.S.

“What you will see is an eight-lane freeway that has been built right up to this pad waiting for us to begin construction of this, the California side or the U.S. side of the border crossing,” she said.

“When it is built, Otay Mesa East will be the cutting-edge technology in being able to reduce border crossing times, move goods and people over the border faster and more efficiently,” she said.

The new crossing essential for growth (graphic provided by Caltrans)

“When it comes to competitiveness for the state of California and looking at all of our trade infrastructure and all of our goods-movement, Otay Mesa East is going to be a very important piece of the overall infrastructure,” she said. “I wish Washington were moving faster.”

Development of the site might go a long way to reversing a trend noted in a recent report by the Los Angeles Times, citing evidence that “Texas has begun to siphon trade dollars and uncounted jobs away from the Southland’s ports and the distribution hubs in the Inland Empire.”

Chinese companies have sharply increased investments into Mexico and been moving products into the U.S. by truck instead of shipping by sea through the “massive” port and distribution systems in Southern California, the paper reported.

Port of Los Angeles Executive Director Gene Seroka is aware of the trend and expects to work hard against it.

“China won’t just sit back and watch tariffs impact their overall work on imports and exports where it impacts their GDP, which is now estimated … to show a 5% growth rate this year,” he told Cargomatic.

“So much more to come as this story continues to unfold. But granted that China will be investing in other countries, Mexico is a big one. We’ll see trade routes shifting, and the Port of Los Angeles has to be in front of this to continue to earn that cargo coming through this gateway,” Seroka said.

But what about the trucking industry? Citing the U.S. Bureau of Labor Statistics, the Los Angeles Times reports that “employment for truck drivers in Texas has been growing nonstop, while California’s has come to a screeching halt.”

Trucks carry most of the US-Mexico trade (chart provided by Financial Times)

That may be an exaggeration, but the U.S. Bureau of Transportation Statistics (BTS) recently reported that trucks carry 71% of the trade between Mexico and the U.S., and that the port of Laredo, Texas, handled nearly 3 million incoming trucks from Mexico in 2023, a 4.9% increase over 2022.

More to the point regarding job losses for truckers, against Laredo’s increase of 4.9%, BTS said Otay Mesa saw a 1.7% decrease of incoming truck traffic between 2022 and 2023—a loss of 18,000 truck journeys.

Getting Otay Mesa East built is clearly a pressing issue for California which has invested heavily in the landside infrastructure of its southern region, from the border northward. Not least, private enterprise also has invested heavily there, too.

Neither the state nor the private investors would care to see those investments decline, something that could happen if the new crossing at Otay Mesa East were to be delayed too long.

Indeed, failure to develop Otay Mesa East could create what Cargomatic Chief Spokesperson and SVP Industry Relations Weston LaBar calls “resource dislocation,” a situation that occurs when trade lanes and cargo volumes begin to shift away from existing infrastructure.

“While global trade lanes can be fluid, the landside transportation infrastructure to support cargo movement is not,” he said, explaining that investments made in “facilities, equipment and workforce” are the result of long-term planning and “cannot necessarily be redeployed” in different regions to deal with shifting trade lanes and cargo volumes.

“The results can vary from stranded assets and distressed businesses to congestion as a result of supporting resource dislocation,” LaBar said.

Completion of the project at Otay Mesa East will ease the current problems of congestion along the border between the U.S. and Mexico, problems that are likely to increase as truck-borne trade continues to grow between the two nations.

Not least, completion of the project also will help ensure the public and private investments in the massive port and distribution systems of Southern California do not suffer the consequences of resource dislocation.